With Legal Assistance of Lt. Governor, Would-be Developer Attempts to Cash-In On Strip Land at Expense of Jilted Lenders

President Donald Trump, who has never made a deal he couldn’t get out of, has nothing on

Las Vegan Howard Bulloch.

With the help of Aspen Financial, a now-defunct hard money lending brokerage that was

owned by Jeff Guinn, the son of former Nevada Governor Kenny Guinn, Bulloch engaged in

serial refinancing of an old motel property across the street from the Mandalay Bay until

Aspen could no longer fund a loan big enough to cover the old loan and new payments.

Despite no improvements to the old motel, Aspen Financial refinanced Bulloch’s “Desert

Land” loan five times, from an initial $10 million in 2001 to just shy of $26 million in

2007.

The FBI’s file on Aspen Financial, which I recently obtained, reveals Desert Land was one

of the loans that caught the feds’ attention.  (See below)  A federal grand jury did not

return an indictment in the case.

Bulloch hasn’t made a payment to some 450 individual investors in the loan in almost a

decade. But with the help of Jeff Guinn and some crafty lawyering to avoid foreclosure or

having to satisfy his personal guarantee, Bulloch still owns the land securing the debt. The

amount owed today is estimated in court documents at $50 million.

Bulloch’s failed Sky-Vue Observation Wheel, which was slated for acreage next to the old

motel, never got off the ground. Now, sensing a market for Strip frontage, Bulloch is

looking to cut the ties that bind him to the Desert Land lenders and the crushing debt he

amassed on the property so that he may market it with the adjacent Sky-Vue land.

If he’s successful, it could spell the end of Nevada’s controversial hard money lending

industry.

Last year Bulloch, with the help of Guinn, began soliciting shares of the Desert Land loan

at a deep discount from some of those investors who haven’t seen a dime in almost a

decade.

Through a corporate entity, Bulloch and his partner David Gaffin, offered to purchase

investors’ fractional interest in the loan for 25 cents on the dollar.  Some who balked were

offered slightly more. Jeff Guinn pitched one investor by noting that his mother, former

First Lady Dema Guinn who was owed $700,000, took the deal.

Bulloch claims he owns more than 51 percent of the loan, and under Nevada law has the

right to eliminate the investors’ interest and his own personal guarantee, which Guinn

never pursued.

But not all of the hundreds of investors who loaned Bulloch the $26 million are willing to

let him off the hook and they’ve gone to court to stop him.

Plaintiffs’ attorney Michael Feder wrote in court pleadings last September that Bulloch’s

effort distorts the intent of the law.

After a number of years of being in default, the borrowers and guarantors on the subject

loan concocted a scheme whereby they created a single purpose limited liability company

– Acquisition – to purchase, at a substantial discount, enough interest in the subject loan

to control more than the 51% of the Loan’s outstanding beneficial interests. … This

insider- oriented transaction tramples on the minority interest holders’ rights and wholly

disregards  Acquisition’s fiduciary obligation to operate in good faith when acting on

behalf of all of the beneficial interest holders. ….Rather than use the statute to allow

lenders to pursue remedies against borrowers, Defendants are attempting to use this

 lender-focused statute in an effort to deprive lenders of their legitimate interests in the

Loan. … Taken to its extreme, a borrower could simply use the initial loan proceeds to

purchase back 51% of the loan interest and then simple decide, supposedly on behalf of all

lenders, that the entirety of the Loan would be forgiven and all remaining liabilities would

be extinguished. This perverse outcome would severely hinder economic growth in this

state and would work a grave injustice on the businesses and citizens of this State.”

Bulloch has the legal help of attorney Mark Hutchison, who moonlights as Nevada’s Lt.

Governor and knows a little something about legislative intent. Hutchison was a member

of the 2009 Nevada  Legislature, which passed the law in question.

Hutchison not only represents Bulloch but also once represented Aspen in forming trusts

that some investors claim made it easier for Guinn to call the shots on defaulted loans, to

the benefit of himself and selective borrowers and to the detriment of lenders.

I emailed Hutchison on December 28, 2016, asking to talk with him about his

representation of both Guinn and Bulloch, but he did not respond.

Ten days later he announced he would not run for Governor in 2018.

Coincidentally, Hutchison got his start in state government as a member of the Nevada

Ethics Commission, appointed by then-Governor Kenny Guinn. He even briefly changed

his party affiliation to comply with qualifications for the post.

Judge Elizabeth Gonzalez will hear a motion to dismiss the case on April 10th. Gonzalez is a

Guinn-appointee to the bench who has previously fought efforts to remove her from cases

involving Jeff Guinn and Aspen Financial.

Jeff Guinn is awaiting a federal judge’s ruling in a bankruptcy fraud trial stemming from

his dealings at Aspen Financial.

Disclosure: In 2015 and 2016 I did investigative work for an attorney involved in litigation against Jeff Guinn.  That work led to discoveries which are included in my upcoming book on Jeff and Kenny Guinn, The Anointed Son: A True Story of Greed, Power and Blind Trust

Desert Land FBI.png


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s